The Market Profile is basically a graphic that shows the time on one axis and another shows a summary of market activity in the form of price distribution.
It should be clear that the Market Profile is a way of representing market activity as it unfolds. There is NOT a system to predict support and resistance or trend, its usefulness lies in knowing interpret.
The elements comprising the Market Price Profile called Time Opportunities (TPOs), which are simply a letter assigned to each half hours composing the session. If you cross a certain price for that half hour, the corresponding letter or TPO is noted next to the price listed on the vertical axis.
The first hour of trading is what is called initial balance. In this period of activity, market makers try to find a range in which buyers and sellers agree to trade.
In general we can say that any movement beyond the range established at the beginning of the session is an extension of range, indicating that something has changed between those involved in the market.
The fall causes some buyers to activate their purchase orders around 1651.6 / 1651 slowing the fall in the bottom of the session until the period "h".
The "h" appearing alone at the bottom of Market Profile called footprint buyer and indicate that buyers rushed into the market to see those making the price levels are rapidly revolved.
The more longer chain letters, must have at least two, the stronger side force that reacts to movements, in this case the buyer side.
The longest sequence of letters that is near the center of the range is called the control point, which represents the price at which concentrates most of the daily activity...
Continue developing this paper, and how to use with price action....
If you are interested in Market Profile leave your comment and I will get more information, if you need this tool I present this partner who has developed this tool for ninja trader:
